R-Multiple Calculator

About this calculator

An R-multiple expresses a trade's profit or loss as a multiple of the initial risk taken, rather than in raw currency: divide the profit per share by the difference between the entry price and the stop-loss price (the "1R" risk unit), and a trade that made twice its initial risk is a +2R trade regardless of whether that was $200 on a small position or $2,000 on a large one. The concept was popularized by trading psychologist Van Tharp as a way to evaluate a trading system's expectancy independent of position size.

Traders use R-multiples to compare performance across trades of very different dollar sizes on a level playing field, to calculate a system's expectancy (the average R gained per trade over many trades), and to enforce consistent risk management — since position sizing to risk a fixed R per trade keeps any single loss from being catastrophic regardless of the instrument's price.

This calculator takes the entry price, exit price and stop-loss price for a trade and returns the result expressed in R, so you can measure every trade against the risk you actually took instead of its dollar profit alone.